What happened Thursday

Economy / news

A review of things you need to know before you sign off on Thursday; BNZ goes low, home loan affordability for FHBs, Treasury has gloomy outlook, NZGB demand strong, swap curve steepens, NZD eases, & more

21st Nov 24, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
BNZ cut its 6 month fixed rate hard to a market-leading level. More here. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here. All updated rates less than 1 year are here, for 1-5 years, they are here.

AFFORDABILITY IMPROVES, BUT STILL VERY TOUGH FOR SOME
The October home loan affordability report shows that while first home buyers with less than a 20% deposit may be able to get a low equity mortgage, they may not be able to afford the repayments. It might be generally ok from Taranaki south, but north of there, it remains very tough indeed.

DEEPER & LONGER THAN EXPECTED
Updated Treasury forecasts will show the recession is lasting longer and budget deficits worsening, chief economist Dominick Stephens said.

CREDIT CARD ACTIVITY MIRRORS THE ECONOMY
Although they rose in October from September (and by a bit more than the normal seasonal change), year on year credit card billings fell yet again, so that extends the decline to ten consecutive months. But the proportion of these card balances incurring interest stayed stable at 53%, and very similar to its average since late 2021, and historically low. So no stress signals here.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. The NZX50 gains +0.4% with Gentrack, Tourism Holdings, NZX, and Ryman Healthcare leading, while Fletcher Building, Auckland Airport, Scales Corp, and Vulcan Steel decline

AGGRESSIVE BIDDING
There was a very well supported NZGB bond tender today, with100 bids totalling $1.446 bln competing for the $500 mln available in three maturities. Only five bids won the most popular maturity, April 2029, and that resulted in a YTM of 4.16%, down from 4.24% at the prior equivalent event a week ago.

UP TRAJECTORY EASES
Something we missed this morning. Today's UST 20yr bond auction, which was again well supported, went for a median yield of 4.60%, which was only up from 4.53% a month ago. This rise is quite limited compared to recent shifts.

CORRUPTION CALLED OUT
The depth and pervasiveness of corruption in India is on display in news items from around the world. In New York, Indian billionaire Gautam Adani was indicted on bribery charges in a US federal court today, with prosecutors alleging the 62-year-old tycoon and other Indian executives promised more than US$250 mln to Indian government officials to contracts. Bribery is also at the heart of a Swiss case against the same people. And Indian steel makers have faced similar allegations. But given the pervasiveness of corruption in India at the top level, there is probably little that will change there. The Americans are prosecuting because Adani did not disclose the bribes in documentation for fundraising in US markets.

SWAP RATES SOFT
Wholesale swap rates are probably a lower again today at the short end and higher at the long end as curves steepen generally. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 4.39%. (Please note that the RBNZ is delaying the release of this data by one day, due to rights issues with the source, the NZFMA. The delay will start on Monday, November 255, 2024.) The Australian 10 year bond yield is up +3 bps from this time yesterday to 4.63%. The China 10 year bond rate is unchanged at 2.10%. The NZ Government 10 year bond rate is up +4 bps at 4.78% while the earlier RBNZ fix was at 4.71% and also up +4 bps from yesterday. The UST 10yr yield is now at 4.40% and up +1 bp. Their 2yr is up +4 bps to 4.31%, so that curve is still positive but now only by +9 bps.

EQUITIES MIXED & MINOR
The NZX50 is up +0.4% in late Thursday trade. The ASX200 is down -0.1% in afternoon trade today. Tokyo has opened with a -0.8% retreat. And Hong Kong is down -0.3% and Shanghai is down -0.2%. Singapore however is up +0.1%. Wall Street closed its Wednesday session essentially no change.

OIL PRICE STUCK
The oil price is again unchanged from this time yesterday, still at US$69/bbl in the US, and at just over US$73/bbl for the international Brent price.

CARBON PRICE ON HOLD
The carbon price is moribund again today because there doesn't appear to be any trades, holding at $63.80/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD UP AGAIN
In early Asian trade, gold is up +US$16 from this time yesterday, now at US$2653/oz.

NZD SLIPS
The Kiwi dollar is down -30 bps from yesterday, now at 58.8 USc. Against the Aussie we are down -20 bps at 90.3 AUc. And against the euro we are little-changed at 55.8 euro cents. This all means the TWI-5 is now at 68.5 and down -20 bps.

BITCOIN RISES AGAIN
The bitcoin price has risen +3.0% from this time yesterday, now at US$94,825 Volatility of the past 24 hours has been modest at just under +/- 1.9%.

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

Daily swap rates

Select chart tabs

Source: NZFMA

This soil moisture chart is animated here.

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62 Comments

by nktokyo | 21st Nov 24, 4:01pm 1732158099

Any mention of the debt limit changes for councils in high growth areas?

by Zwifter | 21st Nov 24, 4:11pm 1732158680

They killed all new growth in Hibiscus Coast because the waste water system cannot cope. No new builds for 7 years and anyone without building consent is stuffed.

by IT GUY | 21st Nov 24, 4:17pm 1732159079

They still using trucks out west

by Baywatch | 21st Nov 24, 4:20pm 1732159256

You mean "we" killed all new growth by not investing in new infrastructure (or maintaining what we already have)?

by Pa1nter | 21st Nov 24, 5:14pm 1732162453

Imagine if we were paying for that now, as well. There'd be even less gas left in the tank.

Best bet is to get a loan for all this stuff now, to be paid for by grandchildren many of us won't be having.

by Murray Falconer | 21st Nov 24, 7:42pm 1732171339

It might be cheaper to 'not grow' if that's the case...

Nope, looks like we're full steam ahead in that department: More Immigration NZ staff, but work visa services unlikely to speed up | RNZ News

Thirty-three new staff start work at the agency next week, but a body representing the immigration industry says that will be a drop in the bucket in overcoming slow wait times.

Businesses who were hoping to have migrant staff in place for summer are waiting more than seven months to get a job check and visa, not including up to three months for accreditation.

It seems delays in INZ processing is the only chance citizens have to get a job these days.

by Kate | 21st Nov 24, 10:03pm 1732179791

And soon to be a shot in growth of incoming from the US, I suspect;

https://www.immigration.govt.nz/new-zealand-visas/preparing-a-visa-appl…

by HughJorgan | 21st Nov 24, 4:20pm 1732159246

This absolutely amazes me. This is what people should be protesting.

Instead Mark Butcher will get another INFINZ award and next year there will be further discussion why rates need to go higher.

by interesting1234 | 22nd Nov 24, 8:21am 1732216898

Guess the land bankers will have to sweat for another near-decade

by ChrisOfNoFame | 21st Nov 24, 4:19pm 1732159176

Longer swaps are about to take a dive.

by M0ralHazard | 21st Nov 24, 4:33pm 1732159993

Why do you think that?

by HughJorgan | 21st Nov 24, 6:47pm 1732168073

They are a function of growth and growth has left the chat.

by M0ralHazard | 21st Nov 24, 6:59pm 1732168765

In NZ growth has definitely left the chat. The US seems to be still ticking along surprisingly well though. You think that will change?

by Pa1nter | 21st Nov 24, 7:09pm 1732169358

Eventually, probably.

by M0ralHazard | 21st Nov 24, 7:27pm 1732170448

Eventually everything and everyone will take a dive. I'm more curious why Chris seems to think it will happen soon

by powerdownkiwi | 21st Nov 24, 7:14pm 1732169674

The US is amassing debt at, what, a trillion every 3 months?

If you call that 'ticking along', fine...

by Pa1nter | 21st Nov 24, 7:19pm 1732169980

I wonder if we tripled the national debt in a similar way whether we could record those sorts of GDP rises.

by M0ralHazard | 21st Nov 24, 7:25pm 1732170319

Oh yeah it's totally paying for growth with debt, but isn't the usual thinking that higher govt debt pushes interest rates higher, not lower?

by Pa1nter | 21st Nov 24, 7:28pm 1732170521

Might depend how much the public money has to compete with the private sector.

by Baywatch | 21st Nov 24, 4:33pm 1732160033

Quiet day out there on the markets...Nvidia earnings...?

by Justa comment | 21st Nov 24, 7:24pm 1732170274

Ryman reports its first half next Thursday. Will be interesting to see if the flowery Forsyth Barr report has any substance. The substantial European holder sold out at around $3.70 from memory.

by Baywatch | 21st Nov 24, 8:09pm 1732172972

Net income during the quarter rose to $19.3 billion, or 78 cents per share, versus $9.24 billion, or 67 cents per share, in the year-ago period. Nvidia’s gross margin rose to 73.5%, slightly higher than analysts’ estimates, and the company said the increase was because it is selling more data center chips.

by J.C. | 21st Nov 24, 5:10pm 1732162206

OK. Crazy crypto story.

Kid in his parents' basement created a coin called $Quant while live-streaming and sold all of it for 128 Solana (approx USD30k) - profit of USD29.6k.

Just like that. Money in the bank. But it gets wilder.

Now, the 51 million $Quant is worth USD4 million.

Same kid then created two other coins - $Lucy and $Sorry - selling all of them for another profit of 103 Solana (USD24k).

The kids are upstaging the Vampire Squid, Jamie Dimon (who gets a cut off everything for doing jack), and even the Aotearoa Ponzi.

by dumbthoughts | 21st Nov 24, 5:23pm 1732163021

Pretty sure this was a Pump Fun scam right? That place is the wildest of the wild west.

It's basically an enterprise now for people in LCOL countries to churn out endless rug pull tokens for reliable profits. This kid just did it more overtly.

Most participants wind up holding the bag or becoming somebody else's exit liquidity on the decentralised exchanges.

by J.C. | 21st Nov 24, 5:45pm 1732164354

100%. But the kid has no fear about hiding what he's done. He's reveling in the notoriety. Not really sure what can be done to prevent him doing what he's up to.

Just to keep things on an even keel, Trumpty Dumpty's pro-crypto stance is not necessarily promoting this nor preventing this.

Naturally the boomers will look down on this while vacuously admiring the tradfi lords who are nefarious in more surreptitious ways.

Just for clarification, the kid could have potentially made close to USD4 million, so some tradfi traders will be shrugging their shoulders. Perhaps he might be picked up by JPM as an intern.

by redcows1 | 21st Nov 24, 5:52pm 1732164727

Why is it a scam?

by J.C. | 21st Nov 24, 6:01pm 1732165312

Scam is subjective and I didn't call it as such.

Let's be clear here. He didn't rug pull. He simply sold his own coins. A rug pull is when you pull out all of the liquidity.

by redcows1 | 21st Nov 24, 6:04pm 1732165471

Was replying to dt as he did. I know jack about crypto but was surprised he called it.

by J.C. | 21st Nov 24, 6:10pm 1732165845

But your question is good. What do we perceive is a 'scam'? And I think that I was alluding to what the tradfi industry does vs these defi markets. For example, the manipulation of the gold markets could potentially be seen as a 'scam.'

by Yvil | 21st Nov 24, 6:33pm 1732167219

BNZ cut its 6 month fixed rate hard to a market-leading level

I wonder if DGM would be man enough to apologise for calling me a moron yesterday, for me saying that interest rates are on their way down?

by J.C. | 21st Nov 24, 6:45pm 1732167955

What's your broader thesis Dr Y? Negative interest rates to preserve the Ponzi?

I for one wouldn't rule it out.

by Pa1nter | 21st Nov 24, 7:13pm 1732169622

After 2008 I came to the understanding that unless there's some sort of system flipping event (like a war or natural disaster), they'll keep playing the same game until there's no more custard to squeeze out of this kitty.

It's not much different to individual addiction, just on a much wider scale.

by HouseMouse | 21st Nov 24, 7:26pm 1732170373

Agree.

But to J.C.’s point - I don’t see an OCR less than 2-2.5% this easing cycle. But it would then only take a moderate negative shock to head to zero, or negative. So over the next 5-7 years, I would say at least a 50% chance the OCR will go negative.

by Pa1nter | 21st Nov 24, 7:31pm 1732170676

Assuming it's only an easing cycle, that sounds most probable. Well, I couldn't say about the 5-7 year part, we're into overtime on the game of "everyone plays nice and prospers in the peaceful afterglow of WW2".

by gnx | 21st Nov 24, 7:58pm 1732172326

and a 50% chance it goes hyper positive?

by HouseMouse | 21st Nov 24, 8:24pm 1732173881

Maybe 5-10%

by Yvil | 21st Nov 24, 8:59pm 1732175954

Well said Pa1nter.

by Yvil | 21st Nov 24, 8:03pm 1732172631

No broader thesis J.C. I simply said that NZ interest rates were going to go down, and DGM said I was a moron for thinking so.

by J.C. | 21st Nov 24, 8:26pm 1732173979

Isn't that like patting yourself on the back because you got 5 ducks in a line on the pokies machine?

by Yvil | 21st Nov 24, 9:04pm 1732176248

No, it's like holding someone to account for their outlandish predictions and for being rude. It's only fair for those who make very strongly opinionated predictions, to face the consequences of their calls !

by Pa1nter | 21st Nov 24, 9:28pm 1732177704

Not really.

There's a consensus on here that's driven fairly strongly by what the poster wishes will happen, rather than objectively approaching the situation.

The last couple of years have run fairly predictably, firmly against much of the consensus on here - no lucky punt on Yvils behalf. What's true is not always popular, and what's popular isn't always true.

The human world is a less than perfect place, full of corruption and injustice. While it'll be absolutely lovely if things were otherwise, that's unlikely to change all on its own.

This site (well, more the comments section) would be of greater value working out how one can best exist or grow economically in spite of how things are and we're they're likely going.

by J.C. | 21st Nov 24, 9:34pm 1732178098

The last couple of years have run fairly predictably, firmly against much of the consensus on here - no lucky punt on Yvils behalf.

I see. So P do why do you think Dr Y and yourself have some inert understanding of what's going inside the central bank bureaucracy and their tactical decisions? Sorry to say but it's no different to flipping a coin on this kind of stuff like whether they cut interest rates or leave them be. But if there is a method, feel free to share. The way the chicken bones fall is not a method. In my books anyway.

by Yvil | 21st Nov 24, 10:04pm 1732179853

"why do you think Dr Y and yourself have some inert understanding of what's going inside the central bank bureaucracy and their tactical decisions?"

J.C, at the risk of sounding conceited, I would suggest the answer is having been in business for many years, being on ground zero. Being in close contact with employees and customers helps to give us a less theoretical and more practical experience of where things are at. It may also help us understand people's psyche, which is often underestimated in assessing situations.

Than again, I might be completely wrong.

by J.C. | 21st Nov 24, 10:11pm 1732180295

I would suggest the answer is having been in business for many years, being on ground zero.

A bat phone to Lord Orr's office? Shouldn't that be illegal?

by Yvil | 21st Nov 24, 10:15pm 1732180523

J.C. have you ever considered that I am Adrian Orr ?

(lol, I'm not)

by Pa1nter | 21st Nov 24, 10:16pm 1732180615

No, it's about being able to accurately read situations and people.

The latter are skills very often lacking by many. Again, corrupted by the individual's own wants and biases.

You wanting me to be some sort of herald reading, water cooler attending, "houses always double every 7-10 years" type, being a prime example. It's easier to try and assassinate a character instead of objectively interacting with them.

by Pa1nter | 21st Nov 24, 10:13pm 1732180413

To some, that'll definitely sound conceited.

But if you're going to remain (or grow) in business, you generally need to be at least partially adept in the manner you have described, as objectively as possible. Not to say someone who doesn't own a business can't do all of those things also, but generally you learn it in a trial by fire.

by Pa1nter | 21st Nov 24, 10:10pm 1732180253

So P do why do you think Dr Y and yourself have some inert understanding of what's going inside the central bank bureaucracy and their tactical decisions? Sorry to say but it's no different to flipping a coin on this kind of stuff like whether they cut interest rates or leave them be.

On any specific micro decision, you can take an educated guess.

Then, zoomed out a little more, you can see overall trends due to cause and effect:

Supply's poked by COVID - you're going to get bad inflation

Country's borders are closed? You're going to get upwards pressure on wages.

Borders are back open? You're going to get mass migration, to make up for years of backlog.

RBNZ puts out low emergency interest rates? They'll disappear once the emergency is done with.

Economies getting crushed due to high rates? The rates will drop.

I wouldn't say understanding this requires much of a method, other than being able to semi accurately determine cause and effect.

by J.C. | 21st Nov 24, 10:13pm 1732180409

On any specific micro decision, you can take an educated guess.

OK. I believe you.

by Pa1nter | 21st Nov 24, 10:19pm 1732180788

Well, regrettable macro situation aside, I've called every one of the above, and it's served me pretty damn well, financially and personally. While my contemporaries are fretting over high interest rates and adverse trading conditions, I'm singing sweet home Alabama.

All summer long.

by Yvil | 21st Nov 24, 10:23pm 1732181029

J.C. I think that, amongst the many, many posters here, you are one of the most open minded person. It seems to me that you are truly prepared to accept other peoples views, no matter how different they are. This is a rare quality.

by Yvil | 21st Nov 24, 10:20pm 1732180853

Pa1nter, it's incredible how similarly we view things. So much that I actually wouldn't even blame some for claiming that you and I are the same person with different accounts.

I would actually enjoy meeting you in real life.

by Pa1nter | 21st Nov 24, 10:25pm 1732181149

I'm always down for some mayhem.

The sites a bit sad. I joined up 3 years ago thinking it'd be a useful source to get a clearer picture of where things might being going. The ticker tape of what's gone down in the articles is of some benefit, but much of the discourse here is a masterclass of people externalizing all their problems. Once you do that, you remove your ability to have much influence over your own situation.

by mfd | 21st Nov 24, 10:02pm 1732179776

It looks more like patting yourself on the back because the first duck has just lined up.

by Pa1nter | 21st Nov 24, 7:11pm 1732169491

I wouldn't wonder too much.

Apparently it's more important to feel strongly about things instead of trying to perceive them with any grounding or degree of probability.

by powerdownkiwi | 21st Nov 24, 7:19pm 1732169948

It's often more important to cling to your narrative, than to entertain that it might be fraught.

And the older a person gets, the less likely that they will change.

by Pa1nter | 21st Nov 24, 7:22pm 1732170141

If they get enamoured or conditioned enough with their own mind, probably.

We tend to identify too much with our own brainfarts, so any objection to them can be perceived as some sort of personal attack.

by Yvil | 21st Nov 24, 9:07pm 1732176474

"Apparently it's more important to feel strongly about things instead of trying to perceive them with any grounding or degree of probability."

I love your work Pa1nter. Then again, making financial decisions based upon "strong opinions" rather than any "grounding or degree of reality" is bound to end up very badly.

by IT GUY | 21st Nov 24, 8:46pm 1732175206

Sorry if you invested in the wrong Napier locations

oh dear

how sad

never mind

by HouseMouse | 21st Nov 24, 8:50pm 1732175426

Ya can’t loose with propatie, maaaate

by HouseMouse | 21st Nov 24, 8:52pm 1732175540

Corruption in India. Nothing new! We have stackloads of cronyism, which isn’t much better.

by Baywatch | 21st Nov 24, 9:13pm 1732176820

Give that man a cigar, no wait a hot tobacco product🤔